This article looks at the processes involved in house purchase and the roles of the professionals involved, including estate agents, solicitors and conveyance’s.
It also covers the nature and contents of two important documents: the mortgage offer, the mortgage deed.
Role of the estate agent.
Brings the property to the market by private treaty or at auction;
Acts as the agent of the vendor, but can advise both parties on areas where
no conflict of interest exists; Receives offers and advises vendor on acceptance.
Liaises with vendor’s solicitors to progress the sale;
Usually paid on a commission basis – typically 1.5-3%, or may be less or a
Other services offered by estate agents: auctioneering, property listings, property management and letting services, arranging mortgages or insurance, survey and valuation services.
Property Misdescriptions Act.
Estate agents have the responsibility to ensure that advertisements and property particulars are not exaggerated or misleading: descriptions must be accurate, the overall description must give a reasonable view of the property, specific problems, however, do not have to be mentioned, mention can be made of special facilities but should carry a qualifying
statement unless the agent has seen documentary evidence of fitting/guarantees etc., measurements should be accurate to within 10cm, photographs should not be misleading.
Role of solicitors/conveyancers.
Investigation of title.
To ascertain whether property is being sold by the legal owner who is entitled to sell it what it purports to be free from restrictions that would inhibit the sales process. It is possible to get insurance to protect lenders against defective title.
Registry searches: Land registry or land charges registry. Local land charges registry. Parcels index – checks whether land is already registered. Companies register. Bankruptcy search. Commons registration – checks whether it is common land.
Confirm what is/is not included in the sale;
Draw up contracts;
Exchange of contracts – point of no return;
Ensuring funds are in place – deposit, mortgage funds;
Assignment of life policies;
Completion – handover money, receive keys etc;
Legal advice at all stages.
Electronic transfer fees.
Failure to identify a defect in the title. Solicitors owe a duty of care. They can be sued in civil courts. They carry professional indemnity insurance.
Home information packs.
Government measure to improve and simplify the house-buying process. Home information pack to be prepared by (or on behalf of) the seller before the sales process begins and includes: title documents, replies to standard preliminary enquiries and searches, copies of building regulations/planning approval, draft contract, home condition report – based on a professional survey, including an energy efficiency rating.
There is concern as to whether buyers will be able rely on a survey paid for by the vendor.
For leasehold properties it will also include a copy of the lease, recent service charges, accounts and receipts, details of buildings insurance.
Not a contract – so not legally binding. Can be withdrawn if: false or inaccurate information has been submitted by the applicant, the applicant’s financial position changes, a change occurs to the property making it less suitable as security.